New ASIC boss prioritises ‘cultural reform’

By Jessica Yun

19 October 2017

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Incoming ASIC chair James Shipton has declared himself a “great advocate” of cultural reform as he prepares to take over from Greg Medcraft in February 2018.

Speaking in Canberra on Wednesday, 18 October, revenue and financial services minister Kelly O’Dwyer announced the appointment of James Shipton to the position of ASIC chair, effective 1 February 2018.

Mr Shipton spoke about his intention for ASIC to be a “strong, proactive, efficient, innovative and strategic regulator”, highlighting trust and cultural reform as key challenges for the financial industry.

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“Culture is among the greatest challenges for all financial markets globally,” Mr Shipton said. “I’ve been a great advocate of cultural reform in financial institutions and in the financial markets for a long time, including when I was at the Hong Kong Securities and Futures Commission.

“I’ve continued work at Harvard University in relation to the conduct and culture of financial institutions, working with overseas regulators.

“I very much intend to continue this important work.”

Mr Shipton currently holds an executive director position at Harvard Law School’s international financial systems program and was executive director at the intermediaries and supervision and licensing division at the Hong Kong Securities and Futures Commission between 2013 and 2016.

In a number of speeches during his time at the Hong Kong Securities and Futures Commission, the appointee argued for more integrity in financial markets.

“A good diagnosis is well established and well articulated, with many important reports, surveys and speeches concluding that culture within our industry is at the heart of the integrity problem,” Mr Shipton said in 2015.

“I would actually go a step further and say — culture is the problem!”

He spent much of his career overseas, with international experience working in London, Hong Kong, Singapore and the US.

He was an investment banker at Goldman Sachs and a lawyer at Blake Dawson Waldron, and later Linklaters.

In order to bolster ASIC’s responsibilities of “gatekeeping, supervising and enforcement”, Mr Shipton said that he would “draw upon [his] years of experience in overseas markets — as a lawyer, as a market participant, as a regulator and now as an academic specialising in financial systems and regulation — to continue to bring best international practice to ASIC”.

He wanted to ensure that ASIC was a “leading market participant” that led by example.

“The greatest challenge, I think, is to make sure that ASIC is that innovative, leading regulator, to build trust and confidence in the markets and, importantly, for those investors in the community that are investing their savings, their retirements into financial markets.”

Mr Shipton said that he was “very happy” with the reforms carried out by the government so far.

“I would make the observation from a global perspective that I think Australia is one of the leading jurisdictions when it comes to the responses to financial crises, but also the ongoing challenges,” the incoming ASIC chair said.

When questioned about the decision to appoint Mr Shipton following the initial choice of John O’Sullivan, who withdrew his application after criticism of his links to the NSW Liberal Party, Mrs Kelly O’Dwyer defended the Turnbull government’s decision to appoint him.

“He is absolutely the government’s choice,” the official said.

“He is someone with experience in regulation directly. As a regulator, he has been at the coal face.

“He is someone who has worked in the financial markets, in investment banking, but also as a lawyer as well, and he is someone who is seen as a world expert, leading the international financial systems program at Harvard Law School.

“I don’t think you could get anyone more qualified or more experienced for the job, and we are absolutely delighted that he has agreed to take on the role and the responsibility.”

Commenting on social media, Shadow Treasurer Chris Bowen said that the appointment was welcomed by Labor.

“I welcome the appointment of James Shipton as chair of ASIC,” Mr Bowen said in a tweet.